10 March 2011

Want to know what happens in a recession? Ask an old guy!

Nerdy accountant with calculatorI was struck today by a post in PR Week on the buoyant or otherwise, mood of PR & Marketing folk facing an economic downturn.

Unfortunately for the author, and (so far, only) comment-poster, their frame of reference is a little thin. They are judging the effects of a downturn based on the ups & downs of the last decade.

Should they be fearing a proper grown-up downturn?

Duh,yeah!

If you work in the PR, marketing & advertising sector, just ask anyone in your office over the age of 40 because they will remember the last period of prolonged recession in the eighties.

With a dread feeling of deja vue, let me explain what we all knew back then.

In a recession, the bean-counters move into the ascendancy, finance directors become the alpha dog in the boardroom, and budgets & staff are cut in this order...

First - PR

Second - Advertising

Third - Research & Development

Fourth - Production (the people at the coalface actually doing the work or providing the service)

Fifth - Sales (Direct sales - people on the phones and on the streets selling directly to customers)

Sixth - HR (You need people to handle the cuts above)

Seventh - Accounts

Is pretty simple to see why.

Costs have to be slashed or clearly justified. Bean-counters like to see definitive ROI. They'll pay for a new machine tool because they know it will increase productivity by x% - a number they can quantify in pounds & pence. Budgeting for a new PR campaign, on the other hand, is pure speculation to an accountant. Likewise funding Research & Development is just too much of a gamble to make accountants feel comfy.

The order of Sales v Production should be the other way round, but accountants have a real need to stay close to the money. They 'sort of' feel that Production can always be made more efficient, but whatever happens, unless Sales are there to actually sign the money, it's all rather academic.

So, where does this leave us?

If the economy goes pear-shaped and you happen to work in PR or Advertising.... OR in the creative industries funded by advertising (ie broadcasting, graphic design, publishing, etc)...

Be afraid! Be very afraid!

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